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Antitrust: restrictive agreements and dominance
On 27 April 2021, the ICA imposed a fine of €102 million on Google for an alleged refusal to allow an electric vehicle (EV) charging app developed by Enel X (named JuicePass) to be published on Google's Android Auto platform.13
In May 2019, following a complaint submitted by Enel, the ICA opened an investigation into Google's conduct. In its complaint, Enel argued that Google was violating Article 102 of the Treaty on the Functioning of the European Union (TFEU) by refusing, with no objective justification, to render Enel's JuicePass app interoperable with the Android Auto platform. After an investigation lasting almost two years, on 27 April 2021 the ICA found that Google abused its dominant position in the markets for the licensing of smart mobile operating systems (OSs) and for Android app stores, in violation of Article 102 of the TFEU.
The ICA identified two upstream relevant markets, in line with the position adopted by the European Commission in its Google Android case:14 (1) the worldwide market (excluding China) for the licensing of smart mobile OSs, where Google is active through Android; and (2) the worldwide market (excluding China) for Android app stores, where Google is active through Google Play. The ICA also referred – at the downstream level – to a 'competitive space' including both EV charging apps (such as JuicePass) and navigation apps (such as Google's proprietary navigation app, Google Maps, which – unlike JuicePass – is available on Android Auto). In the ICA's view, both types of apps offer services used for EV charging (although EV charging apps are specialised, whereas navigation apps have a generalist approach), thereby competing with each other.
The ICA found that Google had abused its dominant position by failing to implement appropriate technical solutions to allow interoperability of JuicePass with Android Auto, despite Enel's repeated requests and Android Auto's indispensability to conveniently reach end users. In this regard, the ICA held that Google should have alternatively (1) developed a template to accommodate Enel's request, (2) developed a tailored custom app for Enel, or (3) allowed Enel to publish a version of JuicePass based on voice commands. In light of the competitive relationship between JuicePass and Google Maps, the ICA held that Google's refusal had an exclusionary intent, as it was aimed at hindering and delaying JuicePass's availability on Android Auto to favour Google's own proprietary navigation app. In addition, the ICA maintained that there was no objective justification for Google's refusal to publish JuicePass on Android Auto.
On 30 November 2021, the ICA imposed a fine of €1.128 billion on Amazon.15
On 10 April 2019, the ICA opened an investigation into Amazon to ascertain whether it abused its dominant position by tying a set of exclusive benefits – essential for gaining visibility and increasing sales on its Italian marketplace (Amazon.it) – to the use of its own logistics service (Fulfilment by Amazon (FBA)). In particular, third-party sellers using FBA are granted the following benefits: (1) assignment of the Prime label; (2) exclusion from the stringent performance indicators that Amazon applies to monitor non-FBA sellers' performance, which can ultimately lead to the suspension of non-compliant sellers' accounts on Amazon.it; (3) increased chances of assignment of Buy Box eligibility; (4) access to special events; and (5) a preferential access route to non-Prime customers. In its final decision, the ICA took the view that these benefits, taken together, can be regarded as a single, non-replicable product – namely a form of 'increased visibility' that generates an increase in sales on Amazon.it.
The ICA considered that Amazon abused its dominant position in the market for intermediation services on e-commerce platforms by self-preferencing its own logistics services. In particular, the ICA found that Amazon's conduct had anticompetitive effects both on the market for e-commerce logistics services and on the market for intermediation services in marketplaces. On one side, the conduct deprived competing providers of logistics services of a significant portion of the retailers' demand; on the other side, it made selling on multiple platforms (multi-homing) more expensive for retailers active on Amazon.it, thus reducing their offers on competing platforms. In other words, the ICA considered that Amazon leveraged its super-dominance in the Italian market for intermediation services in marketplaces both to increase its dominance in that market and to artificially increase its market share of the vertically connected market for e-commerce logistics services.
Amazon argued that the alleged abuse ceased following the launch of the Seller Fulfilled Prime (SFP) programme. The SFP programme allows retailers that meet certain standards and rely on the delivery services provided by carriers approved by Amazon to enjoy the same benefits as retailers using FBA. The ICA rejected this view, in particular because of the absence of objective requirements to be met by alternative providers of logistics services and to Amazon's intermediation between retailers and carriers, which resulted in higher costs for retailers compared with what they might individually negotiate with carriers.
The ICA imposed on Amazon a detailed list of measures to be put in place to restore a level playing field and to foster the development of logistics services alternatives to FBA. In particular, Amazon was asked to (1) publish a list of objective and non-discriminatory requirements for retailers to obtain the Prime label, (2) modify the SFP programme to allow all retailers meeting those requirements to freely choose their logistics providers, (3) monitor compliance with Prime standards without discriminating against retailers that do not use FBA, (4) grant the Prime badge and all other related benefits to all retailers using the SFP programme, (5) abstain from any intermediation between retailers and logistics service providers within one year of the date of the ICA's final decision, and (6) properly advertise the new SFP programme.
In 2021, the ICA dismissed allegations in two cases concerning an abuse of a dominant position for not having collected sufficient evidence to demonstrate the existence of the abuse. This suggests that a new trend is being followed by the ICA: not every difference in treatment by a vertically integrated company between its downstream business units and competitors is capable of distorting competition.
More specifically, on 30 March 2021 the ICA closed an investigation against three equipment manufacturers in the market for maintenance of high-tech diagnostic imaging devices, without finding any abuse of their dominant position.16 The ICA found that the evidence collected during the investigation did not allow confirmation of the allegations put forward at the beginning of the investigation. In the opening decision, the ICA alleged that the three main original equipment manufacturers (OEMs) of high-end diagnostic imaging devices (DI Devices) – namely Philips, GE and Siemens – could have implemented exclusionary strategies aimed at hindering the provision of maintenance services by parties other than the manufacturers. The contested practices consisted of, among other things, the refusal to provide access to service software and information and the refusal to supply spare parts.
The ICA identified a primary market for the production and commercialisation of DI Devices, and for the secondary market for DI Devices maintenance services, the ICA defined three distinct markets, each one related to the OEMs' respective brands (branded aftermarkets). The ICA found that the primary market for the production and commercialisation of DI Devices was highly concentrated, with stable market shares over time. Furthermore, each OEM – with a market share of over 90 per cent in the sale of branded maintenance services – was dominant in its branded aftermarket.
In the analysis of the contested conduct, the ICA concluded that the evidence collected was insufficient. First, the ICA excluded the existence of abusive conduct consisting of the refusal to grant access to the maintenance software of the 'minimum set' and the supply of spare parts. Second, the ICA held that the OEMs' policy of reserving access to the maintenance software of the 'advanced set' (software and service manuals) to their technicians and business partners was compatible with antitrust rules, as the advanced set software was covered by intellectual property and, in any case, was not indispensable for third parties to carry out maintenance activities on the OEMs' DI Devices.
With the same approach, on 29 October 2021 the ICA decided to close the investigation into an alleged abuse of its dominant position by Husky, without finding any infringement.17 After having received a complaint, the ICA opened an investigation into Husky, which is active in the sale of both machinery and moulds for the production of PET preforms. According to the complaint, Husky had installed a system on its new generation high-pressure processing machinery to make it work at full speed only when the original Husky moulds were installed. In addition, Husky had allegedly threatened to refuse to provide technical assistance to customers using competitor moulds on their machines.
In its decision, the ICA found that there was insufficient evidence to demonstrate that Husky's conduct significantly restricted competition. In fact, Husky's system did not prevent clients from using third-party moulds. If they used third-party moulds, for safety reasons the system reduced machinery performance in terms of speed by 10 per cent. However, according to the ICA, there was no evidence that this small reduction in speed was a decisive factor in a buyer's choice of machinery and moulds.
On 20 July 2020, the Council of State referred a case to the Court of Justice for a preliminary ruling on the interpretation of the concept of abusive conduct within the meaning of Article 102 of the TFEU.18 In 2018, the ICA fined Enel more than €93 million for abusive conduct in the market for the retail sale of electricity. The decision of the ICA was partially upheld by the TAR Lazio and Enel filed an appeal against the judgment. The Council of State asked the Court of Justice to clarify whether 'abusive exploitation' should be considered only on the basis of its potential restrictive effects or whether it should also include an additional element of unlawfulness. It also asked whether the abusive conduct should be considered unlawful per se or if other elements should be taken into account (such as the intention of the alleged infringer). In his Opinion of 9 December 2021,19 Advocate General Rantos found that (1) a practice adopted by an undertaking in a dominant position may not be characterised as abusive solely on the basis of its exclusionary effect on the relevant market, as conduct of this kind should not be equated with a restrictive effect on competition unless it is shown that the undertaking has employed methods or means different from those that come within the scope of competition on the merits; (2) Article 102 prohibits not only exclusionary practices that might cause direct harm to consumers but also conduct that might harm them indirectly as a result of the effect on the structure of the market; and (3) to class an exclusionary practice of a dominant undertaking as abusive, it is not necessary to establish the undertaking's subjective intention to exclude its competitors. Such an intention may, however, be taken into account as one factor, in particular in establishing that the conduct is capable of restricting competition. The Court of Justice is expected to release its decision in the coming months.
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